"May 19 by Lunar Calendar": Market Plunges Again — Is It All Due to Muntain Gate's $87.7 Billion Settlement?
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"May 19 by Lunar Calendar": Market Plunges Again — Is It All Due to Muntain Gate's $87.7 Billion Settlement?
Mt. Gox will repay creditors 142,000 BTC (approximately $8.72 billion) and 143,000 BCH ($507.65 million), totaling approximately $8.77 billion.
Navigating Web3 tides with focused insightsAuthor: 1912212.eth, Foresight News
A document with little text has delivered a "blow to the head" to the crypto market.
During European trading hours today, Bitcoin experienced a sharp downturn, plunging 2.4% within just one hour and briefly approaching the $60,000 psychological level, dipping as low as $60,500. Ethereum similarly fell nearly 3% in the same period, reaching a low of $3,240. The broader crypto market followed suit with widespread declines. Rats, which had led gains earlier this morning, gave up virtually all its overnight gains, while altcoins generally dropped more than 10% during the day.
According to data from Coinglass, $105 million in liquidations occurred across the market within that one-hour plunge, including $103 million in long positions and $1.94 million in short positions. Bitcoin accounted for $41.14 million in liquidations, while Ethereum saw $31.39 million.
Prior to U.S. stock market opening, blockchain-related stocks declined broadly: Coinbase dropped 7.26%, MicroStrategy fell 5.19%, and Riot Platforms declined 3.66%.
And once again, the alleged culprit is Mt. Gox.
Mt. Gox Repayments Set to Begin
According to an official website document disclosed earlier, the Mt. Gox trustee stated that BTC and BCH repayments will begin in early July. Preparations are now complete, and information required for repayment has already been exchanged and confirmed with relevant exchanges.
The sheer scale of the payout has caused alarm. Mt. Gox is set to repay creditors approximately 142,000 BTC (worth around $8.72 billion) and 143,000 BCH (worth $50.765 million), totaling about $8.77 billion in potential selling pressure. Shortly after this news broke, the market reacted swiftly with a sell-off.
At a time when market liquidity is relatively thin, such a massive near-$100 billion selling overhang exacerbates existing market fears, prompting investors to exit positions and wait on the sidelines.
As early as May 28, the Mt. Gox wallet—belonging to an exchange that had been bankrupt for 10 years and whose cold wallets had shown no activity for five years—suddenly moved, transferring 141,685 BTC in 10 transactions to an unknown address.
Will the Selling Pressure Be Released All at Once?
Mt. Gox has previously considered the market risks posed by such a large-scale payout.
According to the official Mt. Gox announcement, the repayment plan for creditors includes a base repayment and a proportional repayment. The base repayment allows each creditor to claim up to 200,000 JPY to be paid in Japanese yen. For proportional repayment, creditors have two flexible options: early lump-sum repayment, or staggered mid-term and final repayments.
The lump-sum option only provides partial compensation. For amounts exceeding 200,000 JPY, creditors may choose either a mixed payment in BTC, BCH, and JPY, or full payment in fiat currency. Choosing mid-term and final repayments yields higher total compensation but could take several years. Payment methods also include both cash and cryptocurrency options.
Overall, this distributed repayment structure helps mitigate the risk of a sharp market decline caused by concentrated selling.
Moreover, due to the passage of time, many creditors have already sold their claims to investment funds. Considering potential interest rate cuts later this year, some funds may not immediately offload their holdings.
What’s Next for the Market?
Historically, markets have entered a period of relative stagnation in the months following Bitcoin halvings.
Andrei Grachev, partner at DWF, noted that since 2017, altcoins' market share remained steady at 14.45% until early 2021. Google search interest has been declining since March 2024. A stable BTC signals confidence, but BTC cannot realistically rise 50x at this stage—altcoins can. If Bitcoin remains range-bound, we could see an altcoin bull run within the next few months.
Markus Thielen, founder of 10x Research, said technically, Bitcoin appears to be forming a double-top pattern and is currently testing support levels. Unless this pattern breaks down, it should remain our baseline assumption. This setup could easily push BTC prices down to $50,000—or even $45,000. While U.S. elections and CPI data later this year may provide tailwinds, prices could still experience a steeper correction in the near term.
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